English Court Dismisses Appeal On Point Of Law Against Partial Final Award

In the recent decision of Quiana Navigation SA v Pacific Gulf Shipping (Singapore) Pte Ltd (“The Caravos Liberty”) [2019] EWHC 3171 (Comm), available here, the English Commercial Court dismissed an appeal on a point of law in an arbitral award under s69 of the Arbitration Act 1996 (the “Act“).

The partial final award which was the subject of the appeal concerned a dispute between the owners of a vessel, Quiana Navigation SA (“Owners“) and the charterers, Pacific Gulf Shipping (Singapore) Pte Ltd (“Charterers“), in relation to a BIMCO Non-Payment of Hire Clause for Time Charter Parties (“BIMCO Clause“). In particular, the dispute centred on whether the Owners were entitled to withdraw the vessel for non-payment of hire by the Charterers.

The Owners had been granted permission to appeal on the basis that the BIMCO Clause is a standard form clause, which meant the question of law arising out of the case was of general public importance, and because the decision of the arbitral tribunal was open to serious doubt. However, following a hearing, the Court dismissed the appeal and upheld the finding in the partial final award that, as a matter of contractual interpretation, the BIMCO Clause did not allow the Owners to withdraw the vessel.

Background

The Owners and Charterers concluded a time charter in May 2017 (“Charterparty“) and the payment terms provided for hire to be paid by the Charterers every 15 days in advance. The Charterparty contained the BIMCO Clause, which granted the Owners the right to serve an anti-technicality notice (“ATN“) if a hire payment was overdue and withdraw the vessel if the hire was not paid within a specified period following the ATN.

On the fourth payment date, the Charterers underpaid the Owners by $8,015.40 and the Owners protested but did not serve an ATN. The statements from the Owners leading up to the fifth and sixth payment dates made it clear that the Charterers were asked to pay the shortfall from the fourth payment, along with the normal hire.

The Charterers paid the fifth and sixth instalments in full, but never made up the shortfall. As a result, following the payment of the sixth instalment by the Charterers, the Owners served an ATN on the Charterers under the BIMCO Clause and subsequently withdrew the vessel. A dispute arose as to whether the Owners were entitled to invoke the BIMCO Clause and withdraw the vessel in these circumstances.

The Tribunal's decision

The case was heard before a three-member...